ARTE documentary: A missed opportunity to provide a balanced view of progress and challenges in Fairtrade

14 August 2013

The documentary “Le business du commerce équitable / Der faire Handel auf dem Prüfstand” by Donatien Lemaître, featured on the French and German ARTE on August 6, 2013 (rebroadcast July 15 2014), posed a number of questions regarding the benefits of Fairtrade. Fairtrade is always open to scrutiny and welcomes critique. During the process of filming, Fairtrade producer organisations appreciated the opportunity to work with the filmmaker who sought to understand and report upon the progress and challenges of Fairtrade over the past 25 years.

The documentary raised important issues, including the relative inequality of the poorest farmers within global Fairtrade supply chains, and benefits to migrant workers, particularly those who live and work in Dominican Republic. However the film does not present the complete context in which Fairtrade operates and through which benefits are distributed to producers and workers

The journalist made several contacts with Fairtrade International, FLO-CERT, and a number of National Fairtrade Organizations. We answered all questions posed to us in writing by the journalist. At no point did we refuse to answer a question.

After Fairtrade International had requested additional information from the journalist regarding a possible filmed interview, and, after failing to receive any further information from the journalist, Fairtrade International was not able to grant an interview on an uninformed basis.

I was extremely disappointed when I watched the documentary” said Marike de Pena, Director of Banelino Banana Cooperative. We talked at length to the journalist about the wider challenges faced in Dominican Republic and the work of Fairtrade small producers to improve the lives of their Haitian workers. For example, 60% of Banelino’s Premium income is spent on medical, educational and other social services that benefit all farmers, workers and their families. Other Fairtrade cooperatives also invest significantly in social services for the whole community. I was surprised that the journalist was less interested in exploring the importance of such community development in a context where many Haitians and Dominicans who live in poverty have no access to social security or any form of healthcare. Banelino also supports a school in Haiti to ensure vulnerable populations at the border have access to quality education.

The opportunity was not taken in the documentary to comment on Fairtrade’s existing work to tackle the problem. The issues of Haitian migrant workers in the Dominican Republic have deep historical roots.

Of the estimated 700,000 Haitians working in the Dominican Republic, 90% are without permits, which is the reason why Fairtrade has been supporting producer and local civil society efforts for a number of years to advocate with the Dominican government for a long-term solution, appropriate to the specificities of Haitian migration to Dominican Republic (click here to see a statement of Fairtrade's view of recent changes to Dominican immigration laws).

In 2010, FLO-CERT, the certification body for Fairtrade Standards, instituted a policy that the Fairtrade programme on plantations “specifically includes coordinated and sufficient actions at local and governmental levels in order to improve the situation of migrant workers in the Dominican Republic, securing a long-term solution for the illegal labour conditions and discrimination against these migrant workers”.

Small farmers are also working to improve the situation of Haitian workers. A pre-condition is to address their undocumented status. In the documentary, using Banelino’s 2010 Premium expenditure figures, the journalist claims that Banelino assisted 20 workers in legalizing their worker status through Premium funding. Banelino explains, as they did to the journalist at the time, that in 2010/11, in the absence of implementation of the 2004 Migration Law (not in effect until mid-2012) a system of government issued worker documentation existed. These worker’s permits cost approximately €22, renewed every six months. The $11,000 expended by Banelino in 2010 - 2011 assisted the majority of workers with obtaining legal documents. Fairtrade International has been given the official correspondence from the Dominican Directorate of Migration which indicates the names of 526 workers who received documentation. The journalist appears to have taken this 2011 number and divided it by the new 2012 cost of legalisation following the implementation of the law.

Another calculation offered by the documentary provides an incorrect basis for the conclusion drawn by the journalist. Banelino writes, “The journalist used a large figure for a farmer salary as evidence that these farmers are exploiting their workers by paying so little. The figure is completely misleading as it does not take into account that small farmers have to pay their costs of production (more or less 2900 euros/ha yearly) and packing (200 euros a month, salaries/food/transportation), so the calculations based on just the price for the box is the wrong one. The salary of a farmer such as Ramon (referred to as “Mongo” in film), would average about 100 euros a month, not much higher than a worker”. Banelino has provided Fairtrade International with the official figures on costs of banana production in Dominican Republic compiled by the Dominican Association of Banana Producers (ADOBANO). Banelino’s producers pay above the legal Minimum wage to workers.

Small Producer Organizations (SPO) themselves are also working more widely to improve the situation of their Haitian workers. Seven Fairtrade-certified SPOs in the Dominican Republic, including Banelino, work closely with internationally renowned organisations such as the International Labour Organisation (ILO) on workers’ rights and safety, social dialogue, unions, migration law, child labour etc.; the Food and Agriculture Organisation (FAO) on good agricultural practices; United Nations Population Fund (UNFPA) on gender equality; and many others. A number of these specialise in care for migrant workers, such as Timmy Global Health, working on healthcare for migrants in the Bateys and the United Nations Development Programme (UNDP) on education for migrant workers. Banelino’s website clearly outlines their in-depth social programme designed to support all farmers, workers and their families.

In addition, the journalist states the Fairtrade Premium for coffee as 0.15 Euro per kilogram of coffee. The correct value is 0.15 Euro (or 0.20 USD) per pound of coffee, more than twice the value the documentary mentions ( i.e. 1 kilogram equals roughly 2.2 pounds).

Fairtrade International and FLO-CERT

The documentary also alleges that FLO-CERT does not operate as an independent 3rd party organization separate from its shareholder, Fairtrade International, as both share the same building. FLO-CERT is a separate legal entity from Fairtrade International and is ISO 65 audited and accredited by DAkkS, the German national accreditation body. ISO 65 is the leading internationally accepted norm for certification bodies operating a product certification system. It is accepted all over the world as the strongest indicator that a certification body is competent and impartial, meeting a fundamental and essential element of any credible certification system.

Fairtrade deeply regrets that an opportunity for a thorough exploration of the 25 years of progress and challenges appears to have been sublimated through an apparent desire to prove a pre-existing viewpoint through a non-rigorous approach, selective editing and a disregard for complex and complete facts.

Update on topics relevant to ‘Der faire Handel auf dem Prüfstand’ / ‘Le business du commerce equitable’, 15 July 2014

Since last year, there have been a number of developments relevant to topics covered in ‘Der faire Handel auf dem Prüfstand’ / ‘Le business du commerce equitable’.

Fairtrade International has made a number of important strides towards progress in fulfilling our workers’ rights strategy announced in 2012. Earlier this year we published a progressive new Hired Labour Standard with stronger criteria on freedom of association, wages and worker control over Premium. This standard was the result of two years’ work and consultation with over 400 workers including workers in the Dominican Republic, trade unions and others.

The standard clarifies and strengthens benefits to migrant labourers. Where there is a majority migrant workers (such as on banana plantations in the Dominican Republic), workers can spend up to 50% of the Fairtrade Premium on cash bonus, important for many workers who support their families in their regions of origin. The standard is now in effect as of July 1st.

Fairtrade has made progress on an ambitious living wage project and has published living wage benchmarks for three countries including the Dominican Republic.

Fairtrade has also launched a project to improve the impact of Fairtrade for workers on small farms, and better support the vulnerable farmers who employ them. As a first step research is due to be completed by the end of the year on the diverse situations of workers on Fairtrade small farms and the equally diverse situations of those who employ them.

In 2012 the Dominican Republic government established a legal framework to legalize people of Haitian decent living and working in the Dominican Republic. With this rule change Fairtrade introduced a requirement that all Fairtrade certified plantations in the Dominican Republic get legal status for the workers on their farms, originally for the deadline of 1 April 2014.

In the last months the government put a hold on processing work visas while they were developing a regularization plan, and have just reopened the application process in June. Fairtrade will therefore be considering a realistic deadline by which Fairtrade certified plantations will be required get legal status or initiate the legalization process for all their employees.

Answers on specific topics

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What power does big business have in Fairtrade?

Businesses large and small play an important role within Fairtrade. It is their Fairtrade purchases that ultimately drive impact for producers. Impact studies, such as the 2012 CEval report, show that producers gain many benefits from Fairtrade, but this is dependent on their ability to sell on Fairtrade terms.

However, businesses don’t have a role in Fairtrade governance. In contrast Fairtrade producers control half of the votes in Fairtrade’s highest decision-making body, the General Assembly. Producers sit on the Board of Fairtrade International and are represented at all levels of governance and decision making.

As Fairtrade continues to evolve its model of producer ownership, Fairtrade producers will increasingly set the agenda. While growing the market alone is not the sole route to impact, producers recognise they must increase their opportunities to sell on Fairtrade terms, and therefore support Fairtrade in its strategy to open up new, larger Fairtrade markets for their products.

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Are supermarkets allowed to sell Fairtrade products with higher margins?

Fairtrade cannot legally regulate the final price retailers charge to consumers.

From experience, we have seen many companies absorb the costs of Fairtrade certification and make no change in the price to their consumers. Famous examples include Cadbury Dairy Milk, Starbucks, Ben & Jerry’s, Cooperative and Sainsbury’s supermarkets, and others.

Fairtrade International recently did research about the breakdown of costs within the Fairtrade supply chain for cocoa. We will use this research to try to limit cost escalation. But we can never fully regulate the final price charged to the consumer.

Ultimately, while some companies may charge a higher mark-up for Fairtrade products, this is counterbalanced by an increasing variety and availability of Fairtrade products. Shoppers can now find Fairtrade products of all different price points and qualities.

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How independent is FLO-CERT from Fairtrade International?

Fairtrade International is the sole shareholder of FLO-CERT, but Fairtrade International’s influence over FLO-CERT is limited by law and by a Memorandum of Association. Day-to-day business decisions are taken by FLO-CERT’s Managing Director, who reports to an independent Supervisory Board.

FLO-CERT’s independence, both in theory and in practice, is checked very closely by DAkkS, the German national accreditation body, during regular annual audits.  To date FLO-CERT has not had a single non-compliance in any matter related to a lack of independence.

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What are the Fairtrade rules about child labour?

Fairtrade prohibits child labour as defined by the International Labour Organization (ILO) conventions on minimum age and worst forms of child labour. Children cannot be employed under the age of 15 and no child under 18 years can be engaged in work that hazardous and/or compromises their health, education and/or development.

The Fairtrade Standards distinguish between work that is normal to children’s development and harmful child labour. Children may help their relatives with work under strict conditions. The work cannot prevent them from attending school, it must be guided by an adult family member, and it cannot negatively impact their personal development or health.

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What does Fairtrade mean for workers on small producer organizations?

The Fairtrade Standard for Small Producers Organizations has strict minimum labour requirements in terms of child labour, forced labour, freedom of association, discrimination and pesticide handling. These apply to all workers, whether permanent or temporary, migrant or local, subcontracted or directly employed. The Standard also includes more detailed labour standards for production facilities and sites with a larger number of workers.

Impact reports show that workers within small producer organizations have benefited from Premium projects such as health and community projects. At the same time, we acknowledge that our Small Producer Organization Standard has not adapted fast enough to the changing dynamics on Fairtrade small farms.

The Standard was developed from the perspective of the small farmer who relies on his or her family rather than the small farmer who relies on employing workers on a full or part-time basis. However as Fairtrade has grown, producer organizations and their members have become more complex and diverse. We have increasingly recognised that, as such, the current Standard remains insufficient in addressing employment on small farms, especially with regard to vulnerable workers including migrant workers. This is not an issue unique to Dominican Republic but applies to other Fairtrade commodities in countries with a history of migrant labour, for example coffee in Central America, cocoa from West Africa and tea from Asia.

We are now working hard to bring our Standard up to speed. In 2013 we strengthened the certification criteria for workers’ rights on small producer organizations. Early in 2014 we launched a project to improve the impact of Fairtrade for workers on small farms, and better support the vulnerable farmers who employ them. As a first step research is due to be completed by the end of the year on the diverse situations of workers on Fairtrade small farms and the equally diverse situations of those who employ them. This work follows the completion of our workers’ rights strategy for plantation workers.

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How is Fairtrade working to improve the position of workers in its supply chains?

Fairtrade is committed to ensure the protection of all workers in Fairtrade certified producer operations, including migratory and temporary labour. We are in the process of implementing a workers’ rights strategy for plantation workers, extensively consulted with workers and unanimously endorsed by our international Board. A central aim of the strategy is to strengthen the ability of workers to organize in unions and bargain collectively for higher wages.

Our new Standard for Hired Labour came into effect 1 July 2014, with stronger criteria on freedom of association, wages and worker control over Fairtrade Premium. We are working on benchmarking living wage levels in target regions, and have already announced these benchmarks in three countries including the Dominican Republic.

The next stage of our workers rights’ strategic review will cover the situation of workers on small farms (more information above).

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Does Fairtrade certification benefit banana plantations over small producers?

For many products Fairtrade only works with small-holders. But bananas is a year-round, labour-intensive crop in which 90% of the world export comes from farms larger than 10 ha. The reality is that most bananas we buy are picked by landless workers, vulnerable to many well-documented problems on banana plantations. Fairtrade therefore has a parallel approach in bananas with workers on plantations and smallholder producers.

Twelve years after the first banana plantation entered Fairtrade, small producers remain strong in Fairtrade. They make up more than half of the producer certifications and they have a higher portion of Fairtrade sales. Two out of every three Fairtrade bananas sold worldwide comes from a small farmer organization.

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How is Fairtrade Premium money spent on plantations?

The Fairtrade Premium money earned from plantations’ Fairtrade sales is spent on projects to benefit workers, their families and their communities. In 2010-11 there was considerable Premium investment in worker training, education and capacity building. Workers and their families benefited from direct support such as child-care, provision of loans and credits, housing improvements, emergency payments, financial support in the event of a death in the family, and others. Most of the remaining Premium was spent on other community, education and health-related projects.

The current Fairtrade Standard says that elected worker representatives and representatives of management decide Premium use together as part of the joint body. According to our new workers’ rights strategy, in future workers will make the decision how to invest their Fairtrade Premium while management will have an advisory role instead of voting rights.

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What is Fairtrade’s ambition in the banana sector?

We aim to change the way business is done. Harriet Lamb, CEO of Fairtrade International, states, “While multinational involvement in Fairtrade is still far from transforming the way these big companies trade overall, the fruits of Fairtrade are indeed beginning to show.

“In recent years, we have seen committed Fairtrade retailers moving towards a more sustainable banana trade that benefits farmers, workers and the environment, while there is evidence that the large banana companies are responding to consumer demand for improved social and environmental standards.

“Thanks to our work with companies and consumer pressure, we are seeing certain retailers stride out ahead. Fairtrade must continue to build on these efforts to fundamentally alter the global approach to trade. This is the only route for both small producers and workers to flourish.”

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How does Fairtrade protect farmers and workers from human rights abuses?

Fairtrade works in regions with known risks of human rights abuses. Fairtrade respects national and international legislations, including international human rights law on issues involving sexual harassment and abuse, human trafficking, worst forms of child labour, forced labour and discrimination of any kind. The Fairtrade Standards include strict minimum criteria on these and other core ILO Conventions. Compliance with the Fairtrade Standards is checked by FLO-CERT, an independent, ISO-65 certified company.

The challenges faced by farmers and workers in developing countries go beyond the scope of certification alone. Fairtrade International is building expertise in programme areas including child labour and workers' rights so we can take an ever more proactive approach to addressing the root causes of the problems that affect farmers and workers around the world.

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